Sinopharm Group Co. Ltd. (Sinopharm, 01099.HK) has signed an equity transfer agreement with its parent China National Pharmaceutical Group Corporation (CNPGC), its subsidiary China National Medicines Corporation Ltd. (Sinopharm CNCM), and Shanghai Shyndec Pharmaceutical Co. Ltd. (SSPC).

Key transaction terms • Sinopharm will dispose of a 30.13% direct stake in China National Medicines Guorui Pharmaceutical Co. Ltd. for RMB240.07 million. • Sinopharm CNCM will sell 12.06% for RMB96.09 million. • CNPGC will transfer 8.81% for RMB70.20 million. Total consideration for the 51.00% interest reaches RMB406.36 million, based on an appraised equity value of RMB796.79 million as at 31 May 2026. SSPC will pay 40% of the consideration within five business days of signing, and the remaining 60% within five business days of closing.

Post-transaction structure Upon completion, SSPC will own 51.00% of Guorui Pharmaceutical, while Sinopharm CNCM will retain 49.00%. Guorui will cease to be consolidated into Sinopharm’s financial statements, and Sinopharm will no longer hold any direct equity interest.

Financial impact on Sinopharm Management expects to recognise an estimated gain of approximately RMB45 million, reflecting: 1) the difference between disposal proceeds and carrying values of the 30.13% stake held by Sinopharm; 2) the corresponding difference for the 12.06% stake held by Sinopharm CNCM; and 3) re-measurement of the remaining 49.00% interest at fair value. Proceeds are earmarked for general working capital.

Target company profile Guorui Pharmaceutical, established in 1998, focuses on R&D, production and sales of chemical drugs across anti-infection, cardiovascular, narcotics and other therapeutic areas. Key audited figures: • Assets: RMB1.44 billion; Net assets: RMB717.06 million (31 May 2026) • 2024 revenue RMB469.90 million, net profit RMB32.27 million • 2025 revenue RMB415.07 million, net loss RMB45.29 million

Valuation highlights The asset-based approach yielded an 11.12% premium to book value, driven mainly by higher replacement costs for fixed assets and re-measurement of intangible assets.

Regulatory classification Because CNPGC controls both Sinopharm and SSPC, the deal is a connected transaction under Hong Kong Listing Rules. Aggregate percentage ratios exceed 0.1% but remain below 5%, triggering reporting, announcement and annual review requirements while exempting the transaction from independent shareholders’ approval.

Strategic rationale Sinopharm noted that transferring control of Guorui to SSPC will reduce intra-group competition, streamline asset allocation and advance the coordinated development of its pharmaceutical manufacturing operations.